Cutting back your spending isn’t the only way to save more. Finding ways to up your income can help you build wealth and hit your goals faster—and it doesn’t have to require a lot of time or effort. You can ask for a raise, pick up a side gig (as nearly a third of U.S. workers are doing now) or consider a third powerful income-boosting strategy.
Say hello to passive income—a low-effort cash flow that’s steady, predictable and relatively easy to maintain. Here’s how four people have done it successfully.
"My dividend portfolio pays me over $1,200 a month."
Bob Lai, 35, tech product manager and blogger in Vancouver, Canada
"High-dividend stocks are my secret weapon, netting me more than $1,200 in passive income every month with virtually no effort. Basically, this means that I’ve invested in stocks that pay dividends to shareholders, so I essentially get a cut of each company's profits every quarter—100 percent of which I reinvest. This lets me buy more shares without having to shell out more money, which is a huge benefit when the price ticks up.
My strategy did require some initial effort. But while thoroughly evaluating investments—by checking out price-to-earnings ratios, historical dividend growth and company statements—before purchasing may seem like an intimidating task, I actually enjoy it and don't mind immersing myself in the research.
That said, only investing in dividend stocks can be risky, which is why this is only one part of my overall strategy. I also invest in index ETFs, which are comprised of shares of many different companies and trade just like stocks, to keep my portfolio balanced. Diversification is the name of the game here.
Why am I so focused? Within the next 10 years, the goal is for my passive income to be equal to or greater than my expenses. This is how I define financial independence, and my dividend portfolio is getting me closer to the finish line.”
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October 6, 2017
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